From Barron's, as noted by Michael Genovese of MKM Partners:
"Infinera (INFN) may have a shot at Verizon. The base case underpinning our Buy rating on Infinera does not assume it will win second-vendor status at Verizon for 100G long-haul transport. However, our conversations with Verizon at the event appear incrementally positively for Infinera in its bake-off against Alcatel-Lucent (ALU). The Verizon technology executives made positive comments about the price/performance characteristics of Infinera's unique physical interface card (PIC)-based optical-transport architecture. It remains to be seen whether this is enough to overcome the long-standing relationship between Verizon and Alcatel-Lucent, but we are now slightly more hopeful that Infinera may break through at the carrier."
Sept 15, 2011
Stuart Elby from Verizon speaks at the unveiling of the Infinera DTN-X - see the YouTube video. Elby is also quoted in the press release: "Our growth is continually driving the need for greater integration and efficiency within the network. Innovations such as Photonic Integrated Circuits that enable terabit scale while adding efficiency with integrated transport and switching will be essential to extracting long term economic value as the network scales to hundreds of terabits."
Feb 14, 2012
At an investment conference held by Pacific Crest securities, INFN states that for Tier 1's and Internet content providers operational costs and power costs have become strategic issues. An INFN network is far easier to operate than one from the competition and uses much less power. Power usage will only become more important in the future. INFN mentioned in the presentation that Verizon considers operational costs and power costs top 3 strategic issues.
Around this time Goldman Sachs reports that Verizon is conducting trials of the DTN-X
May 16, 2012
Infinera hosts a workshop in conjuction with Light Reading’s Packet Optical Transport Evolution event in NYC. The workshop focused on the capabilities needed by packet optical networks to best support cloud services, with more than 50 attendees including a large number of service providers. Stu Elby from Verizon followed with a talk on Software Defined Networks (SDN) and how that architecture relates to packet optical transport evolution.
July 24, 2012
During the earnings conference call on this date the JP Morgan analyst specifically asked about Verizon. Tom Fallon stated that Verizon has publicly endorsed INFN's network architecture, and they've endorsed the direction INFN is going.
Sentiment: Strong Buy
Sept 17, 2012
Infinera and Verizon Achieve World Record for Reported Real-Time Polarization Mode Dispersion Compensation
“Our team, with Verizon, was able to demonstrate a coherent optical transmission that can handle large PMD values with our commercially available 500 Gb/s PIC,” said Dave Welch, Infinera Co-founder, Executive Vice President and Chief Strategy Officer of Infinera. “System vendors in the industry today are having a difficult time achieving this. Not all coherent systems are the same."
The importance of this kind of result for service providers is difficult to overestimate. A significant proportion of optical fiber in some countries was installed before the impact of physical stresses was fully understood. The result is that, until now, this fiber could only be used for lower data rate transmission (10 Gb/s or even 2.5 Gb/s in some cases). Some service providers have even written off this fiber as a usable asset, but now much of it can be brought into service for 100G and 500G super-channel transmission.
In summary all signs indicate that Verizon is concerned about ALU going bankrupt and they are getting ready to dump them as a supplier and go with INFN instead.
Sentiment: Strong Buy
Seems like Infinera is selling the DTN and DTN-X to everybody except the Verizon, ATT, and some of the foreign Tier 1's. The stock price will shoot through the top of the chart and computer screen, if Verizon does commit. The system design looks good. Hope Infinera's proposal team's A-game is good enough to win.
Sounds good, except that the writer seems to have interpreted PIC acryonym as "physical interface card" instead of "photonic integrated circuit"
Whatever, as long as Infinera can get into Verizon as a 3rd vendor, per Stuart Elby. 2nd would be a double high-five, given Alcatel's history selling into Verizon.
Infinera historically considering a 10% Customer as major implies $10M-$20M per Q.
India contract being bid was supposed to be $500M, total. Not sure if it's public knowledge what the expected deployment period was, which would define revenue recognition.
I would hope a significant Verizon deployment would amount to about the midpoint, or $270M/year.
Profits should soar, given that they're flirting with breakeven, soon.
How much do you think a 2nd at Verizon would mean in incremental annual sales?
Today's volume was quite good. The stock isn't trading too badly, though there does appear to be a fair number of sellers. Considering the history of the industry, maybe that's to be expected. Most important, that gap clearly was a breakaway gap and that's a good sign.